We know that STROM Telecom opened its doors in 1993. Could you give us a brief historical background of the company?
We are very atypical case. We started, my partners and I, in Sarajevo, as the first private company in former Yugoslavia with foreign investment. In 1992 the war started, and we signed the first big contract, symbolically, with Telecom on April 2, 1992... The war started on April 4th. After that, I spent 9 months in Sarajevo with one of my partners, while the other partner was in Germany. We succeeded and were ready to move out after 9 months. We already had a partner company in Germany, but during the war in Yugoslavia my visa had expired. At this time, my family was already in Germany, but when I tried to enter the country, I could not because of the visa. I went to Zagreb to get the visa, but there were hundreds of people in the German Embassy. A friend recommended that I go to Prague because it might be easier. I came to Prague and traveled to Germany. I really wanted to see my son and daughter, as I had not seen them for nine months. So I left my luggage in Prague so that I would not be sent back at the border... and that is why we are here. I got a new German visa and returned with a car. One evening, we were discussing things with friends in a restaurant and one of them told me - I have a friend in Telecom, try it with them. We gave Telecom some papers and the business started. This same friend also recommended that we set up a joint venture /stock company with Tesla (which was largest communications company in East Europe). We established the company. At the beginning, we had some smaller businesses in Czech Republic, and after that we had some very good ones in Russia. Just to explain; we have very good solutions for the old type of analogue telephone, in order to provide a complete record of calls- who called, when, and so on. In Moscow there was no possibility for any charging, they had just one lump sum. They tried to solve this problem for many years, but they never succeeded because it was not all that easy. We presented our solution and that is how it started. This project alone made 25 million dollars.
When you left Sarajevo, was it already STROM Telecom?
No. We established STROM telecom here.
Our readers are always interested in some financial figures. Could you give us a brief overview of the financial figures of STROM Telecom?
We were financial refugees. I left house, car, money in Sarajevo, as did my partners.
In 1999, it was about 20 million dollars; that´s our complete production, our know-how. Because we started one thing in telephone exchanges, we had some capital and money from that which we invested in other projects. As a result, we have two projects. The first one we call Telesis, that is a customer care system for telephone operators. It is basically a software product, billing system, PMN solution, etc. It means, we support telephone operators to find routes, we believe that it is cheap way to provide good support to their customers.
I suppose you are dealing with eský Telecom on this kind of project? When did you start these projects?
I will explain. This was the first small product. We had the same name and same ideas in Sarajevo. Of course, during this time, all these ideas became more realistic, as we have many more tools to develop it; the technology here is much more advanced.
The second product is digital switching system. We developed a big digital switcher that has a practically unlimited capacity; hundreds thousands ports. Perhaps 80% of our money was invested in this. There is lot of hardware, system software, very sophisticated signal protocol between exchanges etc. We are in the final stages this project now. Of course we had lot of products which are of smaller importance. We have this big switcher and we use the technology for smaller switchers for calls, centrals, which we sell in many countries. Only few companies have these big switchers; like Siemens, Ericson, Alcatel and Lucent Technologies. We signed a contract for two switchers with 60,000 ports for Moscow. On Monday, we will have a visit from Germany to sell first switchers in Western Europe; 2 in Germany, 1 in Austria, and 1 in England.
Since you are the general manager could you give us the guidelines of your strategy, and tell us where you see the future grow of the STROM Telecom?
As you know very well, telecommunication is the best area for development and business. In telecommunications, everything is just beginning. These days voice transfering is very important in telecommunication. Voice is 10s of kB per a second, picture is 10 s of MB. It means that in ten years everything should be in qauntities 100 times more. Transmission channels, switchers, etc. And finally services - internet and video on demand.
These technologies are absolutely new and everything is starting right now. For us, as a company in Prague, as well as for a company in San Francisco. It is very important that we are starting from the same level. Technically, everyone has a chance. Anyone can have acces to the technology, provided he has good organization and money.
It is also very important that we are starting now. That is the fact. We have some advantages compared to western companies. The most important and crucial advantage is people. In 1996, in Germany, you could not find a single engineer because all of them were already working somewhere. We have very specific situation in the Czech Republic; it is much easier to find one here. We also have very strong sources of people in Russia- more than half of the development capacity originated in Russia. We have a company in Moscow - almost 100 people, Novosibirsk and Saint Petersburg. We feel that it works best for these programs to start with absolutely new engineers. The novice engineer should be talented in sciences - physics, mathematics, and that is enough. This is one strategic advantage. Secondly, the Czech Republic itself is an advantage. It is impossible to succeed without Czech people and engineers because the Czech people are very good in technology, in engineering, in mechanics, and in testing. On the other hand, we are from the south, so we are much more tempermental, compared to Czech people. They do not want to take any risks, they like stability, and it is not necessarily good for business. But they are certainly good at experiments, and that is why we have our complete production of switchers here.
Considering this- all these opportunities in data transmissions, are you making new investments in order to be on top of it?
Yes, of course. We have already finished developing a standard switcher. We have a future in mobile and standard telephoning. There is a new product, for which we need new technology, which is called Broad Band Transmission. That means that you have access to a subscriber in MB. This technology already exists, though there is some fight about standards, about dominants, etc. It is, nevertheless, absolutely clear that it will continue to grow. We are preparing world band products, and we are planning production in the third qaurter of this year. We have this technology under control. Through this, we should make alot of big business.
Since your biggest business comes from Russia; what about the Czech Republic? Do you have opportunities in Czech Republic?
We had some complications when we first established the company here, and that is why we are exporting 100% of our production. Perhaps it is not the best solution, but we have alot of business, and we are in a position to choose what we want to do.
But you are working with eský Telecom?
Very little.
What do you think about the new law in the telecom sector?
It could be an opportunity for us. Nevertheless, we are concentrating on other markets, primarly the Russian market because it is totally empty and we already have good infrastructure there- we have support there. The other most important aspect of our strategy is being customer oriented. We go to some telecom operators and discuss their problems. And they say, we have this, this, and this problem. We can react very quickly, we can suggest how to solve the problem in only a couple days- we involve the people. The company says - O.K. we have this program, take it or not. That´s the idea. We have a very modern platform for switchers, which we are ready to adapt to specific applications.
| You have a sister company in Russia. What is your exact relationship with that company?
They work absolutely under our control. For example, our main engineer for development is from Slovenia, 28 years old. He is employed here and also in Moscow, as technical manager. Right now, we still are not too big. Of course, if we grow and get bigger, we will have to formalize something.
But working on the Russian market, is it not a little bit difficult? Is it a secure market?
It is not that it is difficult, only that it is different. You are talking from the point of view of western country. Basically this means that they have their own rules and if you respect them you do not have any problems. For example, we have never had a problem with payment. Those stories about mafia and so on, are just funny. Maybe that is because we do not do cash business - cigarettes, alcohol, etc- maybe that is why we do not have problems.
As you said before, there are still lot of opportunities...
We believe in us, of course. You know what happened with computer companies in the eighties. There were just few companies - IBM, Digital, Honeywell, NCR, etc.. And look what happened to them.
Something similar is happening now in telecommunication. It means that companies like ours should succeed. Of course I cannot be 100% sure that we will succeed, but a company with a logical approach to problems, like ours, should succeed. Maybe I will add a few more details. Now, we are in the process of developing a transit block for telephone exchanges. We started with one card and produced documentation and software drivers. A few weeks later, we saw new components, new chips on the market. We developed a new one. A few months later we saw better and cheaper one. Everything new is better and cheaper. That is what you should be able to hold. That is very important, that is transport, mid-size computers. We have four different compatible interfaces, and we are buying the least expensive components. Like in PC, you have the standard controller, you have IBM disc or Toshiba disc. That is why we are trying to be on the top. Beacause it is cheaper, and if you are able to follow the wave of technology, you will succeed. In computers we developed our own new card. If you produce for thousands of pieces, you must immediately follow because in a few months this component may not be successful.
In connection with this, you also have to look for new markets?
This whole time, while we have been talking about technology, you mentioned that the most important thing is the marke, and that is true.
So you have Russia..
We have very specific relationship with our Russian partners, because it is a 6 year old relationship. We started with a very difficult problem and we solved it. Since then, they believe us. Of course if we could not have solved the problem, I would have said so. Our relationship is based on a very high level of trust. That is why we started this big switcher in Moscow. Because no one else will buy it. We know that. Professionals are talking about the thing, about the switch. Moscow is excellent, it has 5 million subscribers. Now we are talking about selling this for foreign companies. These are small private companies, where they have experts which understand. In big companies with so much bureaucracy, you have no chance. But with some particular references, we will be in a position to offer, but it needs time. For us, the project in Germany is very important. I did not mention that the biggest opportunities are in third world countries, and we already have lot of contacts there. For example, a few days ago we got a letter from Uzbekistan and they offered us a joint venture company. They decided to use our feature and so on. I am sure that you have chances in lot of countries, but it takes time.
How do you approach new markets?
That is why we did not answer Uzbek Telecom yet- because I know what is behind that offer. That is why we will succeed in Russia. You can solve anything. Many times you can have some silly situations. For example, we connect according to protocol and it does not work. How do we explain that it is not our fault? That is why we focus on Russia. Later, we will get organized in other countries- step by step, but it means infrastructure, support etc. I do not know exactly how things will be organized in the future- if we will be with some other company or not. For now we want to finish this project. It means that at the end of this year we will have to decide where to go in future; as STROM or maybe with some new partners. We have already some partners, but we will see.
As you know, our readers are interested in business opportunities. In which areas of your activities are you interested in creating contacts, attracting investments, making partnerships?
That is very difficult. In every country there are just a few operators. The best marketing is to be recommended by someone- word of mouth. It is very specific... In Novosibirsk we had this experience. A man from Krasnojarsk came and asked if we could come and discuss a problem, and we finally found a solution. That is the approach. We think of this as an advantage, especially because we specialize in specific type of market. In 6 months we will have some specific products for the public, for small companies - internet switchers, etc. That means going on the market and selling that to unknown pepople. For now we sell that to companies we know. But we should make this expand this program for wider coverage.
Do you have lot of competition on this type of market?
If we are talking about switchers, there are just a few big companies. We are competition for those big companies. Big companies have some unofficial agreements, what price levels and so on. We are small and we want to break those rules- the set prices. The distribution of companies is like this: small companies and big companies. We have no sales competition in Russia, in the domain of small companies like us.
Could you give us a short historical background regarding your professional experience?
We established this company in Sarajevo. Before that I worked in the Institute for Research and Development; YUNIOS company- one of the largest former Yugoslavian companies, which produced, for example, Golf cars in cooperation with Volkswagen. I was head of Department of Telecommunication. It was a good experience. I finished high school in Belgrade.
In STROM Telecom we have 140 employees- 90% are engineers.
As you are the General Manager of STROM Telecom, what would you say is the achievement you are the most proud of having realized?
We want to show that it is possible to make developments and do business that can be compared to other big companies. That all depends on people.
It is fascinating how knowledgeable the people in Russia are. These people are also excellent on a personal level.
The Germans are now offering 20000 green cards for computer experts in order to get the manpower to complete the project. In Germany they use 100% of people trained in this field, compared to Russia where they only use 1% of the truly talented people. That is an advantage.
What would be your final message to the readers?
No matter what, we believe that we are on the right track. And I know that we have an excellent base in technology. In our current projects we do not have any problems. Our idea is to go on the market in 2 years. It is not easy- you need lot of premises for that. We started in Russia, so now we have to go westward. I am confident that we will succeed, especially because we will go to third world countries where there are big opportunitites. Finally, we should have better product for smaller price. |
